Researchers at the University of Cambridge have just dropped a bombshell that will infuriate every homeowner in the UK. It is set to affect not just those of us sick of rising fuel bills but the hundreds of pensioners a year who die of the cold, unable to afford their energy bills.

Ross Anderson and Alex Henny prepared a a paper (PDF) in February for the Cabinet Office about “smart metering”, a scheme cooked up by Ed Miliband when he was Secretary of State for Energy and Climate Change that was supposed to save energy by replacing gas and electricity meters throughout the country with new digital monitoring systems.

But it was a horribly flawed, Orwellian scheme. Though projected to cost only £11 billion, it “exhibits all the classic symptoms of a failed public-sector IT project”, according to the researchers. What’s more, “the meters will be controlled by the utilities, whose interest is to maximise sales volumes, so there is no realistic prospect that the meters will save energy”.

They will also, in theory, allow energy providers and the Government to monitor your energy usage, recording what you use the most power for and when. Privacy campaigners are up in arms about the devices, which they say make microchipped rubbish bins look amateurish by comparison.

The study published today is called “Ed Milliband’s Poisoned Chalice”. Its authors conclude: “Based on a study of smart metering in 11 countries, we find that Britain has taken longer to devise a more complex and expensive system than any other country… Finally, we make recommendations for how government can avoid the IT disaster which appears likely and which will become apparent by 2014–15.”

“We managed to secure a Cabinet Office review of the project,” wrote Anderson in his announcement this afternoon, “Which came up with a red traffic light – a recommendation that the project be abandoned. However [the Department for Energy and Climate Change] dug its heels in and the project appears to be going ahead.”

Even more worryingly, the researchers allege that Miliband’s department “cooked the books to make the project appear economically worthwhile. It then avoided the control procedures that are mandatory for large IT procurements by pretending it was not an IT project but an engineering project.

Insiders say the project will cost three times as much as a similar scheme in Italy and that it is set to equal the NHS for IT scandal in scale and embarrassment. One civil servant was overheard this week remarking: “The whole thing was Ed Miliband’s gift to the world when he was Energy Secretary. But it’s too late to cancel it now.”

There are fears that smart meters will drive up the cost of energy bills for the most vulnerable in society, contributing to an increased number of pensioners who simply turn their heating off because they can’t afford the bills – with horrifying results.

Nick Pickles of Big Brother Watch said this morning: “Smart meters are the state’s eyes in your house: from when you use your kettle to what you’re watching on TV, it’s no surprise that China is already a big fan of ‘smart cities’.”